Increases in property values in a number of British cities outpaced those in London in 2016, a change that may have been due in part to uncertainty around the prospect of a so-called "hard Brexit".
Some experts have predicted that this shift is here to stay, at least for the next few years, and could shrink the North-South divide in the country’s housing prices.
Strong Showing for Manchester
The cities that saw the biggest increases in property values in 2016 were Bristol and Manchester, where prices increased by 9.6% and 8.9% respectively over the course of the year.
Birmingham also posted higher house price increase numbers than London, 7.5% for the West Midlands municipality compared to 7.3% for the capital.
In addition, Oxford, Portsmouth, and Southampton saw higher rises than London (8.1%, 8%, and 7.9%), but this is less surprising as these southern urban centres have long posted strong house price figures.
Cardiff and Liverpool came in just below the capital with 7.2% and 7% rises, respectively. Nottingham and Bournemouth, both with 5.7% rises, were not far behind.
These numbers come from Hometrack UK, an organisation whose house price index follows the movements in housing prices in the 20 largest cities in the United Kingdom.
According to Hometrack, the increase in the London numbers was the lowest in the last three years. However, it was still a substantial increase, while home prices in the north and midlands remain relatively low.
The average price of a home in London rose to £484,800, and those in Oxford climbed to £422,700. Meanwhile, the average home in Birmingham is still only £147,500, and in Manchester, the average is £151,200.
Still, according to Hometrack, the soaring house prices in and around the capital, and the fact that they are now nearly 14 times average earning levels may indicate the coming of a period of "readjustment", potentially lasting for several years.
Narrowing the Gap
The company’s insight director, Richard Donnell, has said that the next year will be likely to see a similar pattern to that of 2016, where housing prices in the lower-priced cities outpace those in the more expensive markets. That’s to say, according to Donnell, the north-south gap in housing prices "might finally start to narrow once again".
Donnell said the latest index numbers were very revealing, and mean that "the impetus for house price growth is shifting to more affordable cities". Donnell gave the example of Manchester, where he says housing stock is only barely keeping up with the demand for homes, a situation that will inevitably push up prices.
Of all the major cities on Hometrack’s list, Aberdeen is the only one in which housing prices fell in 2016, although according to Donnell, the last few months of the year represented a bit of a rebound for the city.
As for other Scottish urban centres, Glasgow and Edinburgh both posted modest house price increases of 4.9% and 3.7% cent respectively.